Slow and easy will win energy race

Author(s): 
February 15, 2012

It is hard not to detect a note of desperation in the provincial government’s recently unveiled natural gas strategy.

In announcing it, BC Energy Minister Rich Coleman notes that we are “in a foot race” with Australia, Qatar and the United States to push as much of our natural gas as possible to the Asia Pacific, where, for now, gas prices are far higher than here at home.

But does a foot race to feed more gas into the gaping maw that is China’s over-heated economy make economic sense? What might the costs be to BC’s environment and energy security?

Such questions are flying largely below the radar as Premier Christy Clark and her energy minister trumpet the “exciting opportunities” of expedited liquefied natural gas exports.

What neither Clark nor Coleman seems keen to talk about is just how much stress BC’s water resources and hydroelectric network will be under to fuel several proposed LNG terminals on our coast.

That’s because the natural gas destined for export comes increasingly from deep shale rock formations. The method of choice to produce the gas — hydraulic fracturing or fracking — is extremely controversial due to the immense quantities of water that are pressure-pumped into the shale rock to crack it open and release the trapped gas.

Gas companies in BC are setting water-use records for fracking. Six hundred or more Olympic swimming pools of water are being pressure-pumped underground with enough force to trigger small earthquakes at individual fracking operations. The Clark/Coleman vision for “long-term economic prosperity” will see such activities repeated thousands of times over.

But it’s not just our water resources that Clark and Coleman propose sacrificing at the altar of the almighty Yuan. Once such water-intensive gas is produced, it will be piped to the coast for super-cooling to liquid form, then pumped into ocean tankers. The trouble is, the cooling process is extraordinarily energy-intensive, and will seriously strain our province’s water-driven hydroelectric system.

The first such cooling facility is proposed for Kitimat and involves a partnership between American companies Apache and EOG and Canadian natural gas giant Encana. Last year, the partnership cleared its last regulatory hurdle when the National Energy Board approved its application to export gas.

If built, the facility will require up to 4,500 gigawatt hours of electricity to operate. That’s more than one tenth of the power BC Hydro generates in low-water years, and more than 8 per cent of what it has produced in recent high-water years.

But that’s just the beginning. Six companies or consortiums are eyeing gas exports from BC, most recently British natural gas giant BG Group PLC, which is kicking the tires in Prince Rupert. Their power demands combined would swallow at least one quarter of BC’s projected hydroelectric supply in 2016. No wonder that BC Hydro and the provincial government want Site C, a third major hydroelectric dam on the Peace River. With its $8 billion price tag, the dam would supply lots of subsidized power to industry, while driving up everyone else’s hydro bills.

The stresses on BC’s water and hydroelectric resources are not, unfortunately, the only downsides to the Clark/Coleman vision. As noted by David Hughes, a geoscientist who has studied Canada’s energy resources for four decades, a rush to export BC’s one-time natural gas inheritance could, in the space of just 12 years, turn Canada from a net gas exporter to importer.

Then there’s the market that much of our gas is destined for. China may be sitting on its own mother lode of shale gas resources – a supply that the Financial Times recently opined might equal that of the United States.

That may help to explain why PetroChina Co. Ltd. abandoned a proposed partnership with Encana at a gas processing plant in northeast BC last year and why around the same time other state-owned Chinese companies such as Sinopec were investing heavily in shale gas companies in the U.S., acquisitions that some business analysts speculate will provide China with valuable insights into how to extract its own shale gas in future years.

More and more, the race that Clark and Coleman are intent upon winning looks like a losing proposition – one that could saddle British Columbians with a network of industrial white elephants, grotesquely strained water resources and an unnecessarily compromised energy system.

There is an alternative. It’s called go slow. Lower the boom on gas developments by placing firm caps on annual rates of extraction. That will do at least two important things. Ensure higher prices in future years, to the benefit of all British Columbians. And buy us much-needed time to more fully understand the interconnections and interdependencies between water and energy in a province that for too long has taken both for granted.

Ben Parfitt is resource policy analyst with the Canadian Centre for Policy Alternatives and a research associate with the University of Victoria’s POLIS Water Sustainability Project. He is the recent author of Fracking Up Our Water, Hydro Power and Climate available at: http://www.policyalternatives.ca/fracking.

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